Publication: MiningNews Australia
Philippines Quick Fix
over foreign ownership and control of resources projects in the Philippines
may have been allayed, but it will take more than its Supreme Court waving a
wand to trigger an avalanche of foreign mining investment in the
Its re-elected president, Gloria
Macapagal Arroyo, has made warm and fuzzy sounds about now welcoming
foreigners with open arms following a recent landmark court decision
upholding the constitutionality of the 1995 Mining Law. As a result this
means that, on paper at least, foreign miners’ security of tenure is
Arroyo is hoping to revitalise
the mining industry in the Philippines (known for its large low-grade copper
and gold deposits) with a view to building a new engine of domestic economic
growth, and is looking to Australian, North American, South African, Chinese
and other foreign mining interests to drive that growth.
Will it be enough to create an
upsurge in foreign mining investment and transform the mining sector?
While the government’s positive stance fuelled by the new lease of life
the court’s validation of the Act is an encouraging sign, initial feedback
from several quarters seems to indicate that some impediments will not melt
away overnight and the Philippines will continue to be a hard nut to crack,
in the near-term anyway.
A director of the Canadian
Chamber of Commerce, Richard Mills, who has lived in Manila for the past
three years, was among the 400 or so delegates who in the main came away
from an international mining conference held in the Philippines earlier this
month feeling fairly upbeat about the prospects of an escalation in
foreign-funded mining activity going forward.
“The consensus was that
something will happen … that there would be development here,” he said.
Although Arroyo and other government heads and industry leaders unveiled
their increased commitment to support foreign mining investment, Mills
suggested there probably wouldn’t be a mad rush into the Philippines.
“No one felt that the (Philippines mining) industry was going to boom,”
he told miningnews.net. “It is a cautious investment environment
with some optimism for the future.
”Foreign mining companies
weighing up the Philippines as a
potential investment destination will likely tread warily as they are not
necessarily going to get the same warm reception from indigenous
communities, non-government organisations and provincial governments
skeptical of the benefits mining provides. “There are a lot of problems at
the community levels as everyone knows,” said Mills, referring to the
strong anti-mining sentiment of some religious, leftist, rebel and other
local groups. “There is organised opposition to mining and the church is
at the forefront,” he added.
The resistance-to-mining forces
have certainly prevailed, and together with past and present security and
political risk factors, have conspired to keep a lot of foreign mining
companies at bay for the better part of four decades. Placer Dome was the
last foreign group to establish an operation (called Marcopper) in the
Philippines and that all ended in tears.
An Aussie junior, Lafayette
Mining, is one of only a handful of foreign-based trailblazers in the
Philippines and is on the verge of breaking the 36-year drought since
Marcopper was launched. Production from Lafayette’s US$42 million Rapu
Rapu poly-metallic mine is expected to kick off in the June quarter, but
having the jump on other foreigners in the Philippines “hasn’t been
without its trials and tribulations”, according to managing director
“With an inordinate current
focus on social and environmental issues, things haven’t moved as rapidly
as we would have liked,” McIlwain told miningnews.net. He suspects
that attracting increased foreign mining investment may also take some time
to filter through as the Philippines authorities find their way in
implementing the Mining Act.
Mills agrees the creation of an
emerging Philippines mining market underpinned by foreign investment may not
be a speedy process, however, he points out that a younger generation of
government and industry figures does appear to see the opportunities it
Whether that translates into an
“economic takeoff based on a reinvigorated mining industry” as the
government puts it, perhaps comments made in an editorial last week by
former president Fidel Ramos may temper any over-exuberance the validated
Act and recent conference bullishness may have sparked. “The Supreme Court
has given the industry a fresh legal license,” Ramos said. “But only the
local communities where mining companies operate can validate your ‘social
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